TOKYO -- Discount store chain Don Quijote said it hopes to increase tax-free sales by eliminating handling fees as Japan rolls out new tax-free shopping rules for foreign visitors.

While customers may face handling fees when claiming refunds under the new system at some stores, Don Quijote will waive such fees except for customers who choose to receive their refunds in cash at the airport.

"We see waiving the fees as an investment," Yue Luan, manager of the inbound support division at Pan Pacific International Holdings, the operator of the Japanese chain, said at a news briefing on Monday. "By making the service more convenient and attractive to customers, we hope to drive sales and profit growth." The move comes as the government overhauls its tax-free shopping rules Shoppers are now required to pay the full price, including tax, at the time of purchase instead of receiving an exemption as before. The change took effect on Sunday.

Upon departure, they must present a passport at a terminal in the port or airport lobby, which will determine whether a customs inspection is needed. The consumption tax will be refunded only after it has been confirmed that all eligible items are being taken out of the country.

A tourist from Sweden looks at products at Don Quijote's main store in Tokyo's Shibuya district on Nov. 2.

The government is also scrapping a daily cap of 500,000 yen ($3,167) per store on tax-free purchases of consumable goods such as food, pharmaceuticals and cosmetics. The minimum purchase amount will remain 5,000 yen.

"Customers will initially have to pay the consumption tax under the new system, which could affect their purchasing behavior. But the removal of the distinction between consumables and general goods, along with special packaging requirements and purchase limits, could help boost sales," said Luan.

From the retailer's perspective, the new rule may reduce the burden on clerks, as special packaging will no longer be required and the distinction between consumables and other types of goods will be eliminated. The retailer expects the changes to shorten checkout times and plans to use the time saved to make operations more efficient and strengthen services such as multilingual shopping assistance. But some Don Quijote customers remain concerned about the inconvenience and complexity of the new system.

"Having to go through an extra step is a hassle. I would rather just pay the 10% consumption tax," said Ivan, a 36-year-old Australian visiting Japan for the fourth time. "Keeping all of the receipts would be inconvenient," said Connor Sochern, 29, from from the U.K.

Japan has around 64,000 tax-free shops, according to the Japan Tourism Agency, all of which will have to comply with the rule change. Japan's tax exemption at the point of purchase, which dates back to 1952, was nearly unique among major economies.

The overhaul, which was decided in fiscal 2025, was spurred by abuse of the system by foreign travelers who would often purchase items tax-free and resell them within Japan. Almost no visitors who make purchases worth 100 million yen or more can be confirmed to have taken all their items out of the country, according to Japan's customs authorities.